Dividend Yield

Step-by-Step Code Tutorial

Step 1: Setting up the Indicator

To begin, let’s declare the indicator’s location on the chart and ensure it only runs on a daily time frame:

declare upper;
Assert(getAggregationPeriod() == AggregationPeriod.Day, "The Dividend Yield indicator works on a daily time frame chart only.");

The declare upper function places the indicator in the main chart area. We also use the Assert function to restrict the indicator to daily charts, as dividend data is only available on daily aggregation periods.

Step 2: Define Inputs

Next, let’s create some customizable inputs. We’ll set up controls for the yield calculation method, threshold, and options to show labels and chart bubbles:

input yieldCalculationType = {default "default", "1-yr lookback"};
input threshold = 0.04; 
input labelsOn = yes;
input chartBubblesOn = yes;

With these inputs, users can select between two calculation methods, set a yield threshold for visual cues, and toggle labels and chart bubbles on or off.

Step 3: Capture the Dividend Data

We’ll now use ThinkOrSwim’s GetDividend() function to retrieve the dividend data. We need two versions of this variable to capture dividend values correctly:

def dividend = if IsNaN(GetDividend()) then dividend[1] else GetDividend();
def dividend2 = if IsNaN(GetDividend()) then 0 else GetDividend();

The first variable, dividend, carries forward the previous dividend amount, while dividend2 is set to zero on non-dividend dates. This setup allows us to calculate the total dividends more accurately.

Step 4: Calculate Total Dividends

Let’s calculate the total number of dividends for the past year and set a multiplier based on the number of payouts:

def totalDividends = Sum( if IsNaN(GetDividend()) then 0 else 1, 252); 
def payoutsMult = if totalDividends >= 12 then 12 else 4;

We use Sum to count the dividend days over a 252-day period, and payoutsMult determines if the company has monthly or quarterly payouts.

Step 5: Calculate Dividend Yield

Now, we’ll calculate the dividend yield using a switch case for the calculation type:

def dividendYield;
switch(yieldCalculationType){
case "default":
    dividendYield = (dividend * payoutsMult) / close;
case "1-yr lookback":
    def sumPastYrDividends = Sum(dividend2, 252);
    dividendYield = sumPastYrDividends / close;
}

The default method multiplies the current dividend by the payouts multiplier, while the 1-yr lookback method calculates the yield based on the sum of the past year’s dividends.

Step 6: Add Labels

Let’s add labels to display the total payouts, dividend amount, and dividend yield. We’ll also customize label colors based on whether the yield exceeds our threshold:

AddLabel(labelsOn and totalDividends > 0, "Total Payouts: " + totalDividends, color.white);
AddLabel(labelsOn and totalDividends > 0, "Dividend: $" + Round(dividend,2) + " | Dividend Yield: " + AsPercent(dividendYield), 
         if dividendYield > threshold then color.light_green else color.yellow);
AddLabel(labelsOn and totalDividends <= 0, "This company does not pay dividends.", color.light_red);

These labels show only if dividends are available. The yield label will turn green if it’s above the threshold, otherwise it remains yellow.

Step 7: Add Chart Bubbles

Finally, we’ll add chart bubbles to display the dividend yield at each dividend date. These bubbles will also respect the threshold-based color coding:

AddChartBubble(chartBubblesOn and getDividend(), close, AsPercent(dividendYield), 
               if dividendYield > threshold then color.light_green else color.yellow);

The bubbles will only appear on bars with dividends. You can control these bubbles with the chartBubblesOn input.

Step 8: Test and Refine

Save and apply your code in ThinkOrSwim. Test the indicator across different stocks and adjust the threshold and yieldCalculationType to see the indicator adapt. Now you’ve built a fully functional Dividend Yield Indicator, tailored to display dividend data and yield analysis right on your TOS charts!

Conclusion

This Dividend Yield Indicator provides an insightful view into the dividend payouts of any stock that issues dividends, with visual aids and customization to fit your needs.

For more advanced users, you could further enhance the indicator with additional customization options or pair it with other indicators for a comprehensive yield analysis.

Thanks for watching, and good luck trading!